Rights and Duties of Seller and Buyer


Posted On : September 20, 2022
Rights and Duties of Seller and Buyer
Transfer of property is a transfer of all the rights and liabilities of the property to the buyer. But a contract of sale only shows a willingness to transfer the property,whereasa sale is an actual transfer of property. Civil law revolves around the concept of property. It is governed by the Civil Procedure Code and the Transfer of Property Act. Both attorneys and the general public need to be aware of the specifics of property transactions and transfers.
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Most of the property cases are between family members, leading to the diffusion of the joint family into a nuclear one. Therefore, it becomes necessary to have clear views regarding the provisions of the transfer of property in India. The property transferred by way of succession, legacy or in contemplation of death is subject to respective personal laws or sections under the Indian Succession Act 1925 apply over them.

Section 54 of the Transfer of Property Act, 1982 define sale as; 

The "Sale" is the transfer of ownership in exchange for the price paid or promised or partly paid or part promised. ‘           


Essential elements of a sale

1.     Parties to sale

2.     The subject matter of sale

3.     Consideration

4.     Mode of execution of the sale


Parties to sale

There should be a transferor (seller) and transferee (buyer) for the sale of property, and the transferor should be a person who is competent to enter into a contract. In the case of BiswanathSahu vs Tribeni Mohan, the court stated that a transferor could either be the property owner or should have the authority to dispose of such property. For example, 'karta' have the authority to dispose of the property under specific circumstances.?Similarly, the guardian?of the minor person can sell the property only by court's permission.

A transferee should be a person who is competent to take possession of the property and not legally disqualified (insolvent). A minor can be the transferee, and therefore transaction of the sale is valid. 

 

The subject matter of sale

The sale of property given under this act deals only with the immovable property, and that immovable property can be tangible (which can be touched and felt) or intangible (right of easement) in nature. Further, the owner made an express statement to convey his right to transferee for the property, which can be sufficiently identified.


Consideration

The consideration for having a valid sale is that there must be money in exchange for ownership, and nothing other than money can be considered for a valid sale. Time is irrelevant in relation to consideration which means that money can be paid before, at the time or in subsequent completion of sale.

 

Mode of execution of the sale

For the execution of a valid sale deed, there should be a fulfilment of three essentialrequirements; sale deed by transferor should be in writing, it should be properly attested and registered for any immovable property, but these requirements are not compulsory for theproperty which have nominal value or value less than rupees 100. In comparison, the propertywhose value is less than 100 rupees can be done by a simple transfer of property.In the case of? Meghan Enterprises Private Limited v. Official Liquidator, the??court held that the sale of? the property being auctioned by the court does not require the above three essentials, and the certificate of sale by the court is enough for that sale only.       

 

Contract of sale

A contract of sale is only a contract over an immovable property by executing terms settled by the parties for the sale of the property. It doesn't create any right of possession and charge over the property. It is merely a document that further provides the sale of deed.

But the sale of contract gives some rights to the transferee as, after the contract of sale, the transferor cannot sell the property to another person, and for the same, he can be sued by the transferee.

The difference between sale and contract of sale

1.     A transfer of ownership occurs when an immovable property is sold under the TPA. A contract for the sale of immovable property is nothing more than an agreement that the property will be sold in the future on terms agreed upon by the parties.

 

2.     A TPA sale creates a right in rem. A contract for sale makes a right in personam.

 

Buyer and Seller's Rights and Responsibilities

In the absence of a contract to the contrary,the buyer and seller of immovable property are subject to the responsibilities and have the rights outlined in the regulations that follow (or those that apply to the property sold).

The seller is required to:

 (a) disclose to the buyer any material defect in the property or the seller's title thereto of which the seller is aware, but the buyer is not, and which the buyer could not discover with ordinary care, and disclose to the buyer any material defect in the property or the seller's title thereto of which the seller is aware, but the buyer is not;

(b) must deliver all title papers related to the property in the seller's custody or control to the buyer upon his request for scrutiny;

(c) must respond to any relevant inquiries posed by the buyer about the property or the title to it to the best of his knowledge;

(d) execute a valid conveyance of the property when the buyer offers it to him for execution at an appropriate time and place upon payment or tender of the amount payable in respect of the price;

(e) to take as much care of the property and any title papers pertaining to it that are in his control between the date of the contract of sale and the delivery of the property as an owner of ordinary prudence would take of such property and documents;

 

Conclusion

Transfer of property is a transfer of all the rights and liabilities of the property to the buyer. But a contract of sale only shows a willingness to transfer the property,whereasa sale is an actual transfer of property. Civil law revolves around the concept of property. It is governed by the Civil Procedure Code and the Transfer of Property Act. Both attorneys and the general public need to be aware of the specifics of property transactions and transfers.

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Written By:
Kishan Dutt Kalaskar Retired Judge

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